Patisserie Valerie moots Manchester production hub to serve 70 stores

Patisserie Holdings is considering opening a new production facility in the North West that will serve more than 70 of its stores.

The owner of the 200-strong Patisserie Valerie chain has serviced the group over the last few years from its main bakery in Birmingham and from seven satellite bakeries across the UK.

Although it claims to have excess capacity in theses bakeries, bosses at the firm are conscious that as its geographical footprint expands it might need to enhance the way stores are supported.

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Chief executive Paul May confirmed the company has started to review how it best serves its estate from a production and logistical stand point.

“We are currently reviewing options for an additional production facility in the Manchester area with capacity to serve approximately 70 stores as well as in-store baking of morning goods from within all of our stores,” he revealed. “Both of these initiatives will provide additional capacity to the group as well as releasing savings and efficiency and improving product quality.”

Figures published this week show that Patisserie Valerie grew its turnover by 10% to £114.2m for the year ending 30 September 2017. EBITDA shot up £16% to £25.6m over the same period.

The company has opened 20 stores over the last year, with 12 of them in new geographical locations. Remarkably it claims that all new stores are profitable from first day of trading and funded from operating cash flows, with the average store payback period just 23 months.

Earlier this year it entered into a supply only agreement with Sainsbury’s, which saw it trading from 18 Sainsbury’s counters by the year end.

Since the financial year closed it has launched four new stores, with a further two outlets on their way next month. It has also exchanged contracts for two stores and are in advanced negotiations at five more locations.

“The strong performance of our new stores, especially at new geographical locations, continues to provide confidence in our ability to grow our estate across the UK and Ireland,” said Mr May.